By Stephanie N. Mehta
November 23, 2009

Marketing online is about more than jumping on the social media bandwagon

By Sam Cece, CEO, StrongMail Systems.

A decade ago, the term social media didn’t mean much to consumers, let alone marketers and corporate executives.

Today, none of us can get away from the term – it’s everywhere. Companies are jumping on the social bandwagon, erecting fan pages on Facebook, developing corporate Twitter accounts, creating groups on LinkedIn and producing channels on YouTube–all in the name of reaching, engaging and influencing customers on a more personal level.

While the game has certainly changed, it feels as if the social media pendulum has swung a bit too far in one direction. But by taking a closer look, it becomes clear that the more things change, the more they stay the same.

Social media isn’t new (email is considered by many to be the first social network), word-of-mouth marketing has been around for decades (look at the way Amway and Mary Kay Cosmetics products are sold) and viral marketing isn’t a fresh idea (arguably the pyramid scheme, which dates back to Charles Ponzi, was fueled by viral marketing).

Yes, the mediums have changed, but the underlying fundamentals and human motivators have not. People know how to share information. Companies that recognize this are not pushing content, but are promoting engagement, looking at their customers as skilled knowledge brokers who are adept at reaching the right audiences with the right messages at the right time.

Transparency is paramount…

In doing so, these savvy organizations are becoming more open and transparent with their customers. Recent research shows that a company’s willingness to be open is directly tied to revenue growth.

Take for example an online stock trading and information company that we recently worked with on a campaign designed to motivate members to refer friends to their service. The company initially developed a list of promotions they believed would work for their customer base. These included a wide range of offerings from free iTunes gift cards to non-profit donations in exchange for referrals.

But over a period of six months, the company found that none of the incentives they tried were creating a significant lift in business.

…but cash is king

So, they went back to the drawing board, looked more closely at what their members were telling them and decided to try a motivator that was related to what they knew – money. The company offered a $50 cash incentive for referrals, and the response was overwhelming. Since introducing the campaign, the company has seen an 800% lift in new account acquisitions and is now testing similar cash incentives to continue the social sharing trend.

An online provider of personal finance solutions was recently faced with a similar challenge. The company was keen to develop a social channel through which it could drive new customer acquisition. The company tested a number of sharing incentives, including free iPods and other product offers. The initial results were disappointing. After researching the highest potential incentives that would resonate with its customer base, the company offered members access to new product features that weren’t yet available to the entire member base, in exchange for referrals.

The offer was made via e-mail. Some 48% of recipients opened the e-mail, and 10% of them became “influencers” for the company’s brand by sharing the invitation with an average of five friends each.

These two scenarios provide good examples of how establishing a dialogue with customers instead of merely pushing a one-way conversation can enable businesses to prompt identified influencers to carry their messages to new audiences.

By taking the time to understand the principles for motivating these influencers to invest their time, and inserting more social sharing opportunities into existing programs, organizations striving to be more social can create compelling, actionable communication strategies that go beyond the overhyped tactics we’re hearing so much about today.

I’m not knocking Facebook fan pages or the use of Twitter. However, those companies that are willing to step back and take a more philosophical approach to social customer engagement will benefit from stronger customer relationships, more trusted, recognizable brands and incremental revenues.

Cece is CEO of StrongMail, a Redwood City, Calif.-based provider of online marketing solutions for email and social media.

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